Almost 140 jobs at Robert Wiseman Dairies could be lost as it battles to recover from a s23 million profits shortfall.

The company said 68 jobs could go at a dairy depot in Cupar, Fife, with a further, 70 in Okehampton, Devon also under threat.

Both facilities have been earmarked for closure as part of an overall attempt to balance "facilities with operational requirements".

In a statement to the stock market Wiseman said its sales figures were on track with previous guidance.

In September last year the firm warned its profits would be s23 million less than expected across the 2010 and 2011 financial years due to rising producer costs and margin pressures from supermarket customers such as Tesco, Sainsbury's and Co-op.

Wiseman today confirmed it remains on track to report a s7 million profit shortfall for this year, in line with its previous guidance.

The company told the market last September it planned to absorb rising producer costs as well as increasing margin pressures from its big supermarket customers, which it predicted would lead to a s16 million profit shortfall in the 2011 financial year.

Analysts at the time suggested the profits warning was a direct result of one of Wiseman's biggest customers, Tesco, entering into a milk price war with rival Asda.

Tesco agreed to price match rival Asda last September by reducing a four pint carton of milk from s1.53 to s1.25.

Dairy producers are under increasing pressure from supermarket pricing, as increasing fuel and production costs have pushed margins on a litre of milk to just 1.5 pence.

In a market statement today, Wiseman said it recognised the difficulties its suppliers were facing as a result of increasing production costs.

"We note calls from milk suppliers for an increase in the amount paid for raw milk and continue to seek to address this concern, as well as manage our own costs and margins", the company said.

The statement added: "As previously reported, these additional revenues have been absorbed by increased costs, an increase in the amount paid for raw milk supplies and margin pressures in an intensely competitive market.

"In relation to raw milk, we recognise the difficulties faced by our suppliers who have experienced increased costs in recent months."